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You realize you just perfectly described the entire Silicon Valley venture capital funded tech industry, right?

• Barrin92 7y ago
  I really don't think I did. Facebook was cash flow positive after two years, Uber is a decade old. And at the heart of Silicon Valley tech lies the ability to leverage technology and network effects to scale. The biggest driver of costs for Uber are it's ride hailing expenditures, which is to say driver costs, insurance, carrier costs sales and marketing, all of which more or less grow linearly with the entire operation. They're not really a tech company at all, they're an oversized taxi business that redistributes money from investors to software developers and executives.
• twic 7y ago
  No. Software businesses have very high gross margins, because the cost of goods sold rounds to zero. They can be losing money because of high fixed costs, but there's an obvious way out where you grow sales to the point where the margin covers fixed costs, and then it's all gravy from there. Uber does not have unit economics like this.